Friday, November 11, 2016

Remember all those women that were abused on the streets of Cologne on new Year’s Eve in 2015 by men of supposedly ‘North African’ appearance? The way it was reported in some quarters suggested it was really just some sort of unfortunate cultural misunderstanding: the sort that might occur if the newcomers hadn’t picked up the right handbooks. Nobody really wanted to face up to the fact that this was actually something more systematic and deliberate - these men had set about offending progressive western values in the most outrageously public manner possible. Now, the xenophobes among us might conclude that this is essentially a problem of dark people on the outside determined to push their way into our bubble and burst it, out of some sort of twisted envy. But right now this is the least of our problems, because there's a far more numerous demographic of white people on the inside who are also out to aggravate all the sensitive liberals. You don’t even need a nihilistic medieval outlook, you just have to be uneducated, self-consciously downtrodden and pissed off. Tolerance has enemies on all sides now, because tolerance has become associated with smugness and privilege. The discontents of globalisation are legion. Trump voters might not be about to commit atrocities in public places, but in an America that anyway finds it hard to distinguish between an act of terror and a common-all-garden gun massacre, voting for the Donald is perhaps the greatest act of terror one can inflict on the affluent and open-minded.

Thursday, November 10, 2016

Four years of this, minimum. One part of me is sort of excited, another part has a finger on the OFF switch. I'm not sure I can really face all the moaning and griping from latte-quaffing liberal America that a Trump presidency will inevitably induce. I do sometimes wish that the USA could learn to be more of its own problem, like Britain has had to. I wish that I could be about as interested in the fact that they have elected an authoritarian buffoon to their highest office as I would be if Canada or Australia had done it. But one just cannot help getting rather literally yanked back into it. The tentacles are everywhere. Facebook doesn't help, that's for sure. Many of my friends live there, or used to. I largely make my living in the US, in their currency, paying their taxes, so I too am, in a sense, a stakeholder. And the USA has a proven track record, since WWII at least, of interfering in the region where I now live in a thoroughly deleterious manner, going back to the Eisenhower government's sponsorship of the coup of 1954 in Guatemala, which lead to 60+ years of internal conflict instability. Many of the Donald's 'blue sky' policy suggestions represent a clear and present danger to the economies of Mexico and the Central American nations. 1m Guatemalans live and work in the US, many of them not so legally. If Trump keeps his promise to undertake mass deportations the impact down here could genuinely traumatic. And whilst many were indeed economic migrants in the first place, some were also consciously seeking to put some distance between themselves and the effects of US policy. If their country was located on the other side of the Atlantic, Mexicans would undoubtedly benefit from freedom of movement. They are wealthier than Bulgarians, so the Republican party's approach to them makes UKIP rhetoric seem quite tame. Would Europeans ever take seriously the idea of a wall across their continent? Anyway, there I go again. Make it stop.

Last year Guatemala - widely considered an ‘immature’ democracy - presented its citizens with a two candidate choice remarkably similar to that which citizens of the USA were confronted with this week: between an inexperienced television clown and the ex-wife of a previous incumbent The clown presented himself as the walking embodiment of some sort of solution to the country’s political malaise. Other than the fact that she would have been the nation’s first female President, his opponent represented continuity, though for some she was also the corrupt walking embodiment of the malaise. The clown was duly victorious and wasted no time in demonstrating an almost complete inaptitude for government. Many citizens, including those who had voted for him, were soon joining street protests repudiating their choice, largely on the basis that it had not really been any kind a real democratic choice at all. The malaise had become a vacuum. In effect one man had exploited a breakdown of enthusiasm for politicians and public institutions, using a populist platform to take advantage of the fact that many could not bring themselves to repeat the tried and (formerly-)trusted formulas. This week Donald Trump was ‘swept’ to power by 25.6% of eligible American voters. Many of these will have had reservations about their candidate as a statesman, as a human being even, but will have wanted to deliver a big kick in the goolies to the system. Yet arguably, the even more substantial protest was articulated by the almost 50% of eligible voters who just decided not to. So yes, this is a failure of democracy, and not because it delivered a result that people who watch The Daily Show are profoundly anguished about, but because it demonstrates clearly that the process of democratic maturation in the developed world is not as inevitably one-directional as the arrow of time.

Wednesday, November 09, 2016

Obama promised hope, but delivered whatever he could in the circumstances. We might be sad to see him go, but this is partly his failure too. And Bill’s.This is not just a ‘whitelash’ (though clearly this was a substantial dog-whistled part of the rhetorical / geographical strategy that took Trump to the Oval Office), it is also a hearty rejection of the politics of compromise.One can blame those who voted for the Greens or Libertarians, but the damage may have been done earlier on by Sanders. The threat of the Left's own brand of populist protest probably conned Hillary into preaching to the converted and neglecting her so-called blue wall around the rust belt. In the end not only did she not build on Obama's performance with women and hispanics, she also lost the white working classes in crucial swing states.I suppose Trump can now use Congress as a ready-made excuse for stepping back from some of his more outrageous policy suggestions - the ones that delivered the base. The party now has to work out how and when to betray the men in baseball caps. Part of the oddness of this moment is just not knowing how wedded Trump has become to the populist import of his own words. Anyway, the last couple of times I felt such a disgusto at the conclusion of an election campaign - Bush and Pérez Molina - I also speculated that things might not work out so bad after all. But they did.

It’s not just that the data was ‘wrong’, the media also showed that they cannot be relied upon to interpret it correctly in the interests of an informed citizen base. If you think it is only the Trump voters who are being kept in ignorance, you are deluding yourself.

Nobody should look at sharp market gains in the lead up to an event like this and simply assume that the financial world ‘expects’ one kind of result.

I said it before Brexit and I said it again before Trumpshit (see previous post) the markets were being manipulated so that one result - the ‘surprise’ - could deliver significant gains to the big players while the opposite result would not deliver equally significant losses - except to the little guys who had been encouraged to put their faith and their cash in the common sense interpretation.

Monday, November 07, 2016

The so-called Clinton relief rally is under way with the S&P up over 1.5% already this morning.

This supposedly reflects not so much a belief that HRC will win, which the money men admit that they have already priced in, but amelioration of the fear that a victorious Clinton would face a lengthy investigation, possibly leading to impeachment proceedings.

But let's cast our minds back to June and the Brexit referendum when there was a similar spike just before the vote. There my suspicion was that the money men were drumming up optimism amongst their clients so that their own short positions would reap a fine harvest in the unpleasant aftermath.

Something similiar might be happening here. The major indices have been stagnant all year, so these free public votes on the whole system are providing the only serious opportunity to clean up in 2016 (unless you bought into oil at the bottom).

By 'pricing in' a demorcratic White House, the money men are setting up a fairly risk-free opportunity for shorting the market later this week.

Trump doesn't even have to deliver a Brexit-style pollsters' worst nightmare. A narrow defeat, some serious whingeing, a bit of redneck violence around polling stations and the GOP holding on to both houses. Not as good as the full apocalypse perhaps, but good enough for the investment bankers' purposes.

Tuesday, November 01, 2016

The Leave vote in the EU referendum was largely comprised of an odd mix of the older demographic with the regions where poverty and inequality are most manifest.

The Tories might have some traction with the over-50s, but the demographic trend will ultimately favour Return over Remain Out over the next decade or so. In other words ideological eurosceptics in the right wing of the Conservative party will need to maintain an obviously uneasy connection with the dis-empowered and downtrodden, presumably via nationalistic/xenophobic rhetoric: the classic snobs and mobs scenario.

I cannot see this lasting at all. To counteract the demographic tendency, the government would have to try to persistently foster the social anger that underlies the protest vote and somehow avoid becoming the target of it.